Preparing for Serialization

Implementation of serialization is so essential, drug makers’ future “right to do business” depends on it, according to Daljeet Sahni, associate director, Global Supply Chain at Bristol-Myers Squibb (BMS) in a webinar conducted on February 27, 2013 (1). On the downside, there is no single path to full serialization. Risks are high due to regulatory volatility and the sheer number of touch points and technologies involved.

Existing and pending regulations continue to evolve and vary worldwide. Three regulatory models currently exist:

Change of ownership – Documentation occurs each time the product changes hands.

Track and trace – Documentation occurs not only with each new owner, but also whenever the product changes location.

The track-and-trace model, which is the most complex, meets California requirements taking effect in 2015 and 2016. Since achieving track-and-trace capability will likely enable BMS to meet any less stringent regulations that follow the authentication or change of ownership models, it is the scenario the company has decided to follow. “With no agreement at the regulatory level, we’re trying to build flexibility into our approach,” Sahni explained.

Other hurdles toward serialization include the lack of agreement about how supply chain partners will exchange data, management of the vast amounts of data that will be generated, and the formidable capital investment and manpower requirements associated with new technology, packaging equipment, process changes, program management, central data repositories, and revision of standard operating procedures. Further complicating the situation is the relative scarcity of vendors with the knowledge, skills, and bandwidth that will be needed to implement serialization on approximately 7000 lines worldwide. As a result, Sahni advocates a multi-vendor strategy to mitigate risk.

Despite the challenges, “We have no option [but to move forward],” Sahni stated. He is confident it will be a worthwhile journey. Ultimately, he predicts, serialization will generate tremendous value by creating a transparent supply chain, enabling personalized medicine, supporting just-in-time logistics, improving service levels and inventory management, and reducing counterfeiting and diversion.

“Serialization will not prevent counterfeiting, but will be a major step forward,” he said. Other anticounterfeiting tools still will be needed, he added, noting BMS has a group focused on ways to protect consumers and products from counterfeiting. With the counterfeit market probably underestimated at $35 billion to $75 billion per year with a 6–20% growth rate, it will remain an “issue we must address,” he said.

BMS embarked on its serialization journey in 2011 and has already completed a pilot. However, Sahni warned, “As scope increases, complexity increases.” With impact felt internally and externally, “change management requirements are humungous,” he added. As a result, he recommends paying careful attention to how data standards are built, harmonization of internal processes and data standards, establishment of data governance, and building in scalability to manage large volumes of data.

As regulations take effect, he said, “There also will be a need to manage serialized and non-serialized product at the same time for some period of time.” So systems must be able to handle either type of product, at least short term.